XBRL is an open data standard for financial reporting. XBRL allows information modeling and the expression of semantic meaning commonly required in business reporting. XBRL uses Extensible Markup Language (“XML”) syntax. XBRL is commonly used to define and exchange financial information, such as financial statements, corporate action filings, and the like. In the United States, the Securities and Exchange Commission (“SEC”) requires certain entities to provide financial statements and other filings using XBRL.
In typical usage, XBRL consists of an instance document, containing primarily the business facts being reported, and one or more taxonomies, which capture definitions of individual reporting concepts, certain relationships between concepts, and other semantic meaning.
For example, the US Financial Reporting Taxonomy Framework (“USFRTF”) is a collection of XBRL taxonomies that can be used to express the financial-statement-based reports of public and private companies across various industry sectors. The document, “US Financial Reporting Taxonomy Framework,”1 summarizes information about the USFRTF and is incorporated by reference for all purposes. 1 Available at http://www.xbrl.org/us/USFRTF/2005-02-28/USFRTF%202005-02-28%20Explanatory%20Note.htm
In addition, USFRTF includes several industry-layer taxonomies, including the us-gaap-ci taxonomy (commercial and industrial companies), us-gaap-basi (banking and savings institutions), us-gaap-ins (insurance entities), and the like. Such industry-layer taxonomies allow entities in particular industry categories to express industry-appropriate financial statements in XBRL.
USFRTF industry-layer taxonomies define various extended link “networks” containing concepts that make up various standard reports or forms. For example, the us-gaap-ci taxonomy includes, inter alia, a Statement of Financial Position network, an Income Statement network, and a Statement of Cash Flows network, which respectively contain concepts that make up balance sheets, income statements, and statements of cash flows.
However, very few entities use the standard industry-layer taxonomies unmodified. Rather, almost all entities add various taxonomy components by extending the USFRTF to suit their specific reporting needs. For example, the airlines industry might create an extension to the us-gaap-ci taxonomy, in which the concept “Airplanes” may be added as an extension of the standard concept “Property, Plant and Equipment.” Thus, the networks included within the standard industry-layer taxonomies may be regarded as “templates” that are customarily extended to create entity-specific networks.
As discussed above, XBRL is extremely flexible, and almost every entity that uses XBRL for reporting is able to extend a standard taxonomy (e.g., the USFRTF) to customize it to suit that particular entity's needs. However, this flexibility and entity-specific customization can make it difficult to compare and/or analyze filings across many entities in an industry.